Is the City muddling into oblivion?

One of the most valuable parts of the UK economy, the City, will not be greatly affected by the UK leaving or staying in the EU. The EU market will continue to be governed by EU regulation. The UK market may be a bit freer but UK regulators will try to ensure it is not. The rest of the world market will not be affected. Any greater freedom would be offset by no longer being officially part of the EU lawmaking process. Unofficially, the UK’s position as a major net importer should secure some attention.

You might expect the City, faced by these troubled waters, to have a realistic long term vision and a strategy to get there. You would be wrong. The City believes it has done well muddling through the last 300 years and therefore it should carry on doing so. Each new EU directive can simply be challenged as it heaves over the parapet.

Furthermore the government has no idea what the City should want in the longer term. And therefore it cannot help. The Chancellor has just demoted the City from the attention of the Treasury Financial Secretary to that of the Economic Secretary.

And even if the government did know, does the UK have enough influence in the EU to bring it, or most of it, about? Business for Britain claims that the UK was outvoted on every single one of the 55 occasions it voted “no” to new EU legislation. This is independently supported by Full Fact. Europhiles per contra claim that the UK’s vote was successful over 90% of the time but that is because the UK voted “yes” over 90% of the time. Maybe the UK has been successful behind the scenes but there is no evidence of that.

Venice was the financial capital of the world in the 18th century just as London is today and for many of the same reasons. Latterly it failed to see the threats from Paris and Amsterdam (in particular) just as the City is failing to recognise, still less plan to counter, its competitors today. Future tourists floating down the Thames are likely to be listening to the same stories that those on the Grand Canal hear today.